Thursday, January 29, 2009

Newell Rubbermaid Earnings

Newell Rubbermaid reported earnings today for the fourth quarter and for fiscal year 2008. The company had a loss on the year and a loss on the quarter. For the quarter the company reported earnings per share of -.11 versus a profit of .36 per share last year. The company is calling for earnings per share for 2009 in the range of $1.20 to $1.25. Analysts are expecting $1.10 somewhere towards the lower end.

The company is focusing on reorganizing products into more fitting categories. The company also is trying to improve on gross margin and cash flow. The company continues to do well in gaining markets in Latin America and Asia. Thirty percent of revenue now outside of the United States.

The worst news probably to hurt the stock was the dividend cut. The dividend as many companies are doing was cut in half. The yield still stays at around 5% at todays price. The company has paid a dividend of .21 per quarter since 2000 with no raises. One citigroup analyst said the dividend cut was imminent in order to help with credit and debts, and still rates the stock a buy.

Newell Rubbermaid has a market cap of 2.42 billion and an enterprise value of 5.2 billion. This means the company is value at less than half the price of its cash and assets. The book value on Yahoo Finance is just over $8 a share, which is just short of where the stock ended today.

I continue to rate the stock a buy. I have had shares since around $14 and still think shares are worth $20 with the brands that this company makes.

*Disclaimer-I own shares of Newell Rubbermaid in my real life Sogotrade account.

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